The Imagine America Foundation 2016 FactBook

Summarizing and Interpreting Our Findings

Rarely are career colleges acknowledged for the tremendous impact they have on the American workforce and on countless individual lives. When the sector isn’t being entirely overlooked, it seems, it’s being cast in a negative light.

One reason for the negativity may be that career colleges are seldom truly studied. They’re almost never the focus of statistical, impartial evaluation that gives credibility to the sector’s real accomplishments. Annually, the Imagine America Foundation (IAF) provides an exception. The recently released 2016 FactBook offers a look at the impressive accomplishments of the career college sector of higher education, backed by real data. The statistics outlined in the FactBook show that despite facing great challenges and, at times, turmoil, America's career colleges continue to make a positive impact on their students and the American economy.

Prepared by leading industry analysts, the FactBook contains research and analysis of important trends in the private, for-profit sector of higher education. It highlights exactly who career college students are, the unique challenges they face, and the unique opportunities career colleges are poised to create.

Here, we’ll provide an overview of the findings presented in the 2016 FactBook, taking a high-level look at how many students choose career colleges, who those students are, and the reasons that career colleges best suit their needs.

How many students choose career colleges?

While traditional public colleges and universities struggle to keep education affordable for students and outcomes correlated with employment demands, career colleges have created unique opportunities for millions of students. In the 2014-15 academic year, career colleges accounted for 47 percent of all America’s Title IV-eligible institutions and served more than 3.3 million students. This number represents double the proportion of postsecondary students served by Title IV-eligible career colleges versus 10 years ago — 6 percent to 12 percent.

The growth career colleges have seen over the past decade is, in itself, a sign of the role the sector plays in responding quickly to student demands, but over the past year, the number of students enrolled at career colleges has actually declined, while public and nonprofit institutions saw no significant enrollment change. It remains to be seen whether this decline will indicate a new trend for the sector or is due in part to a number of career colleges converting to nonprofit institutions or going out of business in light of federal regulation enforcement. Regardless of the recent enrollment slowdown, more than three million students still chose career colleges — and despite their varied backgrounds, they are often united by a few common threads.

Who chooses career colleges?

Career colleges open the doors of higher education for historically underserved student populations — those with the most to gain from higher education. In 2014-15, 48 percent of students at Title IV-eligible career colleges were minority students, compared to 37 percent at public institutions and 29 percent at private, not-for-profit institutions. In fact, from 2009-10 to 2014-15, the annual enrollment of black, non-Hispanic students grew by 39 percentage points at career colleges, compared with 7 percent growth at public colleges and a 17 percentage point gain at private, not-for-profit institutions. In the 2014-15 school year, career college demographics broken down by race looked like this:

White/non-Hispanic: 38 percent

Black or African-American: 22 percent

Race/ethnicity unknown: 21 percent

Hispanic or Latino: 15 percent

Asian/Native Hawaiian/other: 3 percent

American Indian or Alaska Native: 1 percent

Non-resident alien: 1 percent

They’re also much more likely to be over 25 years old (81 percent of students at four-year career colleges versus 29 percent at public four-year institutions), financially independent (80 percent at career colleges versus 49 percent at public institutions), and be single parents (32 percent at career colleges versus 13 percent at public institutions).

Additionally, 49 percent of students at private, for-profit schools in 2011-12 were children of parents with a high school education or less, compared to 23 percent at private, not-for-profit schools and 33 percent at public schools. Only 23 percent of for-profit students’ parents had a bachelor’s degree or higher, compared to 53 percent at private, not-for-profit schools — that’s essentially a complete reversal of family support and privilege levels the students at these two types of institutions have behind them.

But these students are more than statistics, more than underdogs.

They are working parents, hoping to improve their income potential to provide better futures for their children.

They are displaced workers, determined to learn new job skills for a rapidly evolving marketplace in a hands-on, career-focused program.

They are first-generation students from low-income families who never imagined going to college until they found the personalized support and flexibility available from a career college.

These students each have unique stories, and through a mix of unique inclusion, scheduling and financial factors, career colleges offer many of them the chance at a future they never imagined possible.

Why do students choose career colleges?

Career colleges often offer distinct advantages over other types of schools for the populations they serve.

Career colleges succeed in creating opportunities for minority and nontraditional students because they are especially responsive to the needs of these student populations. Whether through their focus on teaching, creating degree programs that give students the flexibility to learn when it is convenient for them, or making entire programs available through distance education, career colleges are sensitive to the fact that many of their students do not have the opportunity to spend years in a traditional postsecondary environment.

First, for students who are working while attending college, live in rural areas or are in the military, the availability of programs provided entirely through distance education can be essential to their ability to enroll in college. Career colleges deliver educational opportunities to these students, leading the way among four-year institutions in the percent of undergraduate students enrolled entirely in distance education and in offering entire programs through distance education. Sixty-four percent of four-year career college students enroll exclusively in distance education, compared to 8 percent for public four-year colleges, and they have more opportunity to do so: 38 percent of four-year career college programs are available entirely through distance education, compared to 9 percent for public four-year colleges.

Second, the hands-on aspect of the educational experience appeals to many students who do better with concrete learning instead of the more abstract learning offered by many other colleges.

Third, the career college experience is purposeful and structured to be efficient. Students can move through their educational experience quicker than they typically could at traditional colleges or universities. For example, it takes an average of just 14 months to complete a certificate program at a career college, compared to 22 months at a public college or 25 months at a private, not-for-profit college. Many career college students find the speed at which education is delivered and the direct connection between the training and the job to be motivating, especially those who need to factor in the lost wages or opportunity costs associated with higher education. The shorter time to degree and career is critical for students with limited resources and endless responsibilities.

How do career college students pay for their education?

Compared to public institutions that receive a significant portion of their funding from government sources, career colleges get the majority of their revenue from tuition and fees. Eighty-nine percent of total revenues at two-year and four-year career colleges came from tuition and fees at career colleges in 2011-12, compared to just 22 percent at public four-year institutions. Six percent came from government grants, contracts and appropriations at four-year career colleges and seven percent at two-year career colleges versus 40 percent at public four-year institutions and 71 percent at public two-year institutions.

While career colleges rely on tuition to be able to provide students with educational opportunities, they also focus on delivering the highest possible value for students’ educational dollars. This commitment to keeping costs down for students is evident in the fact that career colleges have been successful at limiting increases in their published tuition during the recent period of economic slowdown.

Between 2011-12 and 2014-15, while four-year public institutions averaged a 13 percent increase in published tuition and fees, career colleges averaged only a 6 percent increase.

The career college sector enrolls larger proportions of nontraditional students who typically have lower family incomes than do students at public and private, not-for-profit institutions. Their students often do not have the resources to pay the full price of attendance. As a result, while public institutions are able to subsidize many students’ tuition from government revenue; and private, not-for-profit institutions may have generous endowments to support low-income students; many students at career colleges depend on financial aid, including federal grants, student loans, institutional grants and state grants to finance their educational investments.

Career college students are much more likely than public and private not-for-profit students to use student loans, and more likely than public and private not-for-profit students to use Pell Grants.

Since the majority of their students rely on student loans to pay for their education, career colleges are sensitive to the fact that many students are part of a demographic group that has a higher risk profile for default than the overall student population, with including delayed enrollment, no high school diploma, part-time enrollment, financial independence, having dependent children, single parenthood and working full time while enrolled.

Students with three or more of these risk factors are considered to have a high-risk profile. Fifty-nine percent of career college students have high-risk profiles (three to five, or more, risk factors) versus 38 percent for public institutions and 24 percent for private, not-for-profit institutions.

Interestingly, however, students at career colleges are repaying their student loans at a higher rate than are public college students, 59 percent at career colleges versus 51 percent at public colleges.

How do career colleges benefit students and society?

The benefits career college students expect from their higher education, like increased earning potential, job security and self-esteem, don’t just affect them as individuals. Those benefits also affect society through increased economic productivity, increased tax revenues and decreased reliance on social safety nets, not to mention the economic activity of the career colleges themselves, which pay taxes on every dollar of revenue.

For most career college students, a degree is only the beginning. On average, college graduates earn more than those with a high school diploma ($70,400 annually for those with bachelor’s degrees; $50,230 for those with associate degrees; and $36,210 for high school graduates and GED holders), and that is not likely to change soon.

Keeping career colleges alive

America’s career colleges work every day to provide fast, flexible, career-based opportunities for minority and nontraditional students, veterans, and other disenfranchised learners. They focus on teaching and preparing students to join the workforce with the skills and training they need for today and America needs for tomorrow.

Despite the obstacles and judgments cast their way, career colleges continue to bridge the gaps between students and their ambitions for higher-paying careers; between the workforces of today and tomorrow’s most in-demand professions; and between the enrollment capacities of public and private, not-for-profit institutions and the ever-growing demand for higher education and the benefits it can provide.

Sidebar: Career colleges surpass public institutions in the enrollment of students who are

Female: 65 percent of students at not-for-profit institutions versus 55 percent at public institutions and 58 percent at private, not-for-profit institutions

Minority: 48 percent of students at for-profit institutions versus 37 percent at public institutions and 29 percent at private, not-for-profit institutions

First-generation: 49 percent of students at for-profit institutions have parents with no postsecondary education versus 33 percent at public institutions and 23 percent at private, not-for-profit institutions

Low-Income: 51 percent of students at for-profit institutions have an income of less than $20,000 a year versus 32 percent at public institutions and 22 percent at private, not-for-profit institutions

Military and veterans: 9 percent of students at for-profit institutions are military and veterans versus 4 percent for public institutions and 4 percent for private, not-for-profit institutions

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The Imagine America Foundation (IAF) has been serving the career college community since 1982. IAF provides scholarships, awards, ﬁnancial aid information, sector research and faculty training; honors achievement in career education; and supports and promotes the beneﬁts of career colleges to the general public.